INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 25, 1998

• 1530

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I'm going to call the meeting to order. Pursuant to an order of reference from the House, dated Thursday, October 29, 1998, the committee will now proceed to study the supplementary estimates (B) 1998-99, votes 1b, 5b, 20b, 25b, 30b, 35b, 50b, 55b, 70b, 75b, 85b, 90b, 95b, 100b, 110b, 115b and 120b, under Industry.

[Translation]

Ms. Francine Lalonde (Mercier, BQ): Madam Chair, on a point of order.

The last time I was at one of this committee's meetings, there was a second round of questions that ended before I managed to put any questions to the witnesses during that second round. I think that the way you chaired the meeting was inappropriate.

I've consulted Beauchene's Parliamentary Rules and Forms where it says this about the principles of parliamentary law:

1. The principles of Canadian parliamentary law are: to protect the minority and restrain the improvidence or tyranny of a majority; to secure the transaction of public business in an orderly manner; to enable every member to express opinions within limits necessary to preserve decorum and to prevent an unnecessary waste of time; to give abundant opportunity for the consideration of every measure, and to provide any legislative action being taken on a sudden impulse.

Madam Chair, I regret things went that way. I know that the brief question I put concerning the military bases where products are warehoused and about the preparation concerning the year 2000 were extremely important. I would have liked to put another question to Vice-Admiral Garnett, and his answer could have been useful for everyone.

In future, when there's a second round, I'd appreciate it if time were shared equitably. I'm expressing this wish not only for myself, but also for my colleagues on the opposition side so that they may enjoy the same rights. Only equity can guarantee a harmonious relationship. We don't always agree, but we should be able to debate secure in the knowledge we will be respected.

[English]

The Chair: With all due respect to your opinion, Madame Lalonde, I recall that day quite correctly. We were forced to wait over 10 minutes to start that meeting because there was not an opposition member present from any of the four parties. We try to ensure—

And yes, Mr. Dubé was the first one here. However, that could be the precedent I set. That could be the party I start with: whoever is here first when we're forced to wait.

That being said, the time was equitable between the opposition and the Liberal Party members who were present. We went back and forth across the table.

I keep accurate records of the time. If someone goes over by a minute, I allow the other party to go over by a minute. Usually, it works out within a minute or two of each person's time that day. I specifically stated that we had other witnesses, that we'd have to move on at a certain time. I apologize if you feel in any way that you were slighted or that it was in any way directed at you. I stated very clearly that we had a second set of witnesses, that we had to move on, and at what time we would do that. And I kept to that schedule.

We're going to go through this tomorrow, witness after witness, and we're going to have to move on. We can either stop abruptly if there are only two opposition members present and allow each of you one chance, with one Liberal member, and that's the end of it, or we can continue with the time allotted for the witnesses, and the next time we can start with the next person.

I apologize if you feel slighted. However, I think it was more than fair. I think if all four opposition parties had been present at that meeting—there were only two—no one would have had a second opportunity to ask a question.

I'll revisit the issue, but I've spoken with several clerks about it. In the past, some clerks have allowed people to ask questions in the order in which they arrived at committee.

• 1535

However, if that had been the case that day, only Liberals would have been able to ask questions, because they were the only ones here waiting for opposition members to arrive.

I apologize and I'll take that into consideration. Had I known it was only one question— I assumed that you wanted five minutes, and I couldn't give you five minutes. Next time I'll try to do my best to accommodate all the people who have questions. However, your question was asked under some kind of agreement.

[Translation]

Ms. Francine Lalonde: Madam Chair, I think it is inappropriate for you to mention that we were 10 minutes late that day while it has often happened that I have had to wait for the first member of the Liberal majority and a sufficient number of his colleagues to show up. If you consult the roll, you'll see that we are blameless, we do not represent the Official Opposition. I would like all this to be on the record of this meeting.

[English]

The Chair: Madame Lalonde, I appreciate your comments, but with all due respect, we only need one of you present to start any meeting. As long I've been here, there's been one other member when there's been an opposition member here at the time to start. We've never had to wait for a government member—that I can recall—to start a meeting. But we'll keep accurate track of that from now on, believe me.

Mr. Stan Keyes (Hamilton West, Lib.): Walt does.

The Chair: Walt keeps track. Walt has a perfect attendance book of everybody who shows up. If anybody wants to know if they've been here, check with Walt.

Some hon. members: Oh, oh.

The Chair: That being said, we do have witnesses from Industry Canada before us: Ms. Mary Zamparo, the corporate comptroller, and Mr. Jerry Beausoleil, the director general of the strategic policy branch. My understanding is that Ms. Zamparo is going to be giving the opening statement, after which we'll move to questions. We'll try to ensure that everyone has adequate time.

Ms. Zamparo.

Ms. Mary Zamparo (Corporate Comptroller, Department of Industry): Good afternoon, Madam Chair and members of the committee.

[Translation]

Thank you for the opportunity to meet with this committee to discus this year's Supplementary Estimates "B" for the Industry portfolio.

My name is Mary Zamparo and I am the Comptroller for Industry Canada. With me is my colleague, Mr. Jerry Beausoleil, director general, Strategic Policy Branch. Mr. Beausoleil is available to respond to questions related to horizontal policy issues included in these Supplementary Estimates.

This year's Supplementary Estimates B include initiatives announced in the 1998 Budget and additional requests such as the bank merger review and the tourism program transfer from the Department of Foreign Affairs and International Trade.

[English]

The balance of the supplementary estimates requests are largely technical items such as the operating budget carry forward. These items were not finalized at the time of the main estimates. The supplementary estimates of $278.5 million for the industry portfolio account for about 9% of the total supplementary estimates seeking Parliament's approval to spend some $3 billion.

To begin, I would like to take a few minutes to briefly outline the more important changes that are included in these supplementary estimates for the department. In addition, I will touch on the more important items for the portfolio partners of Industry Canada.

The budgetary main estimates of Industry Canada amount to $1 billion for the year 1998-99. With the addition of these supplementary estimates, total estimated spending will be some $1.1 billion, approximately the same level as the 1997-98 actual expenditures, as recently reported in the public accounts.

Mr. Walt Lastewka (St. Catharines, Lib.): Could I just stop the witness for a minute?

The Chair: Mr. Lastewka.

Mr. Walt Lastewka: We're trying to sort out whether the copies were distributed or not.

The Chair: Copies of the speaking notes should be in front of everyone. Everyone who was here when the meeting started has one. As quickly as possible, the messenger brings those that arrive after the meeting starts. The estimates are coming. They were in your offices. For those who didn't bring them, the clerk is trying to arrange for additional copies—and for those who did not receive them.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): Some of us did not get the copies.

The Chair: They were sent to your offices in October. And some have miraculously arrived for members who said they didn't receive them earlier.

Some hon. members: Oh, oh.

The Chair: Ms. Zamparo.

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Ms. Mary Zamparo: Thank you.

The Industry Canada supplementary estimates for the current year amount to $113 million. More than half of this amount, $58.5 million, is accounted for by funding for the SchoolNet or community access program. As part of the initiative to make Canada the most connected country in the world, the government invested $205 million over three fiscal years to enhance and extend efforts to connect schools, libraries, and rural and urban communities. The funds will also be used to enhance the connectivity of 10,000 voluntary organizations by providing them with access to computer equipment and the Internet.

The second major item included in these supplementary estimates is an amount of almost $19 million for the automatic operating budget carried forward from 1997-98 to 1998-99.

The third item included in Industry Canada's supplementaries is some $8.5 million for the spectrum management program. Additional funds are required to effectively manage the spectrum resource.

[Translation]

The responsibility for the delivery of the tourism program abroad has been transferred from the Department of Foreign Affairs and International Trade to Industry Canada. As a consequence, these Supplementary Estimates provide for the transfer of some $5 million from DFAIT. There are no new costs associated with this transfer.

Some $4 million in additional operating funds are required for the review of the proposed bank mergers by the Competition Bureau. The proposed mergers are the largest and most complex merger transaction proposals to be reviewed by the Bureau. This is imposing an extraordinary administrative burden on the Bureau.

[English]

The 1998 budget announced the government's commitment to expand the National Research Council's successful industrial research assistance program by an additional $34 million a year to provide greater support for Canadian small business in adopting new technologies and developing new products and processes for commercial markets. Through a partnership between the NRC and Technology Partnerships Canada, repayable contributions of almost $8 million will be made for small projects by small and medium-sized enterprises.

The estimates also include contributions of $7.8 million under the Canada infrastructure works program in the province of Ontario. These funds are being re-profiled from 1997-98 to 1998-99 because of slippage in program implementation from one year to the next. There is no increase to the overall accrued funding levels for this program.

The estimates include just over $1 million for the implementation of recommendations contained in the June 1998 renewal of the Canadian biotechnology strategy. The result is that the department is undertaking projects aimed at improving knowledge flow to industry and the public, helping industry access market information and promote its products and capabilities abroad, and monitoring public attitudes on biotechnology to better understand public concerns.

Total 1998-99 main estimates for the industry portfolio partners, excluding Industry Canada, amount to some $2.2 billion. With the addition of the $165.4 million for supplementary estimates (B) and after supplementary estimates (A), the total estimated spending will rise to $2.6 billion.

Of this amount, some $26 million, or 16%, is related to the automatic carry-forward provisions for all seven agencies appearing in these supplementary estimates. A further $9 million is due to collective bargaining settlements and is included in four of the agencies. The total increased operating budget estimates amount to some $117.4 million—or over 70%—of these supplementary estimates.

The most significant capital expenditure item, $63 million, is related to the Canadian Space Agency program, RADARSAT.

The increased requirements related to grant and contribution programs amount to $48 million. The major items are found in the Atlantic Canada Opportunities Agency—$30.6 million—and in a $1.5 million transfer of funds from Fisheries and Oceans to Western Economic Diversification programs aimed at stimulating economic regional development related to small and medium-sized businesses and industries.

The supplementary estimates for WED also include $15 million for contributions to western provinces under the Canada infrastructure works agreements, which represents a carry forward of 1997-98 lapses. There is a small increase for the granting councils of some $5 million for the grants and scholarships programs of the Natural Sciences and Engineering Research Council and the Social Sciences and Humanities Research Council, of which almost $3 million of the $5 million increase is for additional requirements for contributions to the Networks of Centres of Excellence program.

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[Translation]

The ongoing programs and services of Industry Canada and its portfolio partners continue to assist all sectors of our economy in line with our strategic objectives and remain at the centre of many of this government's most important policy initiatives.

We welcome your questions on these issues.

[English]

Thank you, Madam Chair.

The Chair: Thank you very much.

We're now going to begin the questions with Mr. Anders, if he has any.

Mr. Rob Anders (Calgary West, Ref.): Indeed I do.

First off, I want to speak to the first vote, which will be coming up. The Competition Bureau is asking for an additional $4 million to study the bank mergers. I just want to know whether or not we're going to get a guarantee from the department that this report is not going to be shelved once it's completed.

Ms. Mary Zamparo: Well, I can speak to the $4 million increase. That's an extraordinary increase because this is by far the largest merger review that the bureau has ever had to deal with. Additional resources in the order of $4 million were needed for them to be able to undertake this extraordinary work that they're doing.

In terms of what will happen to the report, I will ask Jerry to comment.

Mr. Jerry Beausoleil (Director General, Strategic Policy Branch, Department of Industry): As you're probably aware, the report will in fact be given first, I believe, to the banks that have filed with the Competition Bureau and asked for the assessment, and subsequently, I think, it will be given to the Minister of Finance, who is the minister responsible for the financial institutions. As the Minister of Finance has already indicated, he'll be taking the contents of the report into consideration—as he will the reports of the House committee and the Senate committee and a number of other reports—when he deliberates on what to do next

Mr. Rob Anders: I can just hope that we have a guarantee from the minister, since this is falling under his purview, that this money is being well spent and that he's responsible for it.

I'd also just like to go on to another part of what's going on here. You're looking for an additional $4 million—no, sorry, it's $30 million you're looking for. My apologies. A million here, a million there, and pretty soon we're talking real money.

You're looking for an additional $30 million with regard to the Atlantic Canada Opportunities Agency, and yet in the public accounts reports for 1997-98 we have three cases in terms of fraud revealed. I've certainly spoken about these cases in the House, whether it's the blood bank corporation or numerous others. You have $4 million down the tubes there. What measures are in place to ensure that the fraud isn't going to occur again? And why did these measures fail in the first place—if you have any measures right now?

I'll boil down the question. You're asking me for $30 million more and there are reports indicating that $4 million has been squandered. I want to know why we should be giving you more money if you have—it's in your own reports—$4 million that wasn't accounted for.

Ms. Mary Zamparo: The $4 million—

Mr. Rob Anders: Cases of fraud that cost almost—

Ms. Mary Zamparo: Yes. There were three cases of fraud. The agency does expect to recover some of that money. When cases of fraud are suspected—as was the case with these three projects—ACOA immediately refers the matter to the RCMP. ACOA has provided assistance to over 35,000 projects since 1987, with less than .13% encountering similar difficulties, so in general this does indicate that Atlantic Canadians are very honest and law-abiding people and that fraud has not been a major problem.

Mr. Rob Anders: My problem isn't with Atlantic Canadians; it's with a government department that sometimes violates its own rules, gives out money according to political favouritism, and doesn't recover the money on behalf of Atlantic taxpayers. That's my problem.

• 1550

I'm also going to ask some questions with regard to what's happening with what I guess you'd call “corporate welfare” in this country. The government is asking for almost $8 million worth of additional money for the Technology Partnerships Canada program, yet it cannot provide a clear loan repayment schedule. I have a Maclean's article here, and I could go through it and quote verbatim a lot of the problems we have with corporate welfare in the country.

Of course you're well aware of the Canadian Taxpayers Federation and some of the work they've done on this issue, such as the issue of the money that's gone out to companies like Bombardier. Of course I can quote the finance minister's own declarations with regard to this: “It is our view that protecting and subsidizing business is almost always the wrong way to go.”

We have all sorts of problems with this, and you're asking for even more money, when, from what I can tell, 83% of all the TPC money goes to Quebec and to Ontario. If I had to draw some conclusions, I'd say there was some vote-buying going on with this whole thing.

Mr. Stan Keyes: Now wait a minute.

Point of order, Madam Chairman?

The Chair: Mr. Keyes.

Mr. Stan Keyes: Madam Chairman, with all due respect, I let the first one slide, because he— Our colleague across the way, from the Reform Party, makes certain allegations that border on badgering a witness, but beyond that, also makes accusations that are arguable at least and false at most, and then to say this again— I'd ask that the chair direct the individual from the Reform Party to maybe couch his questions in a more cordial fashion, in a little less political one. That could definitely be debated right now, before he goes any further.

The Chair: Thank you, Mr. Keyes.

Mr. Anders, if you have questions that relate to the specifics of the numbers, the officials are here to answer those questions. If you have policy or political questions, you can reserve them for the House.

Mr. Rob Anders: All right. I'll rephrase that question. How is it that the department recovered just 15% of more than— sorry —$3.2 billion in contributions with regard to defence and aerospace firms? And why is it that of the $600 million in new projects—in which companies promised to invest $2.4 billion of their own money—52% has gone to companies based in Quebec, 31% to companies in Ontario, only 13% to the west and only 2% to firms in the Atlantic provinces?

The Chair: Ms. Zamparo.

Ms. Mary Zamparo: TPC is a new kind of programming and is very competitive. Firms submit projects, and the programming is based, basically, on their competitiveness in the marketplace. They are investments that are made with a view to risk-sharing and with a view to the impact they will have. In terms of repayment, you did mention, I think, $3.2 million—

Mr. Rob Anders: Billion

Ms. Mary Zamparo: Billion. Excuse me. That's the amount that has been spent on repayable and conditionally repayable contributions. The amount that has been actually spent on repayable contributions is $700 million, of which $375 million has been repaid, so 53% of the fully repayable contributions have been repaid so far. In regard to the rest, those projects are conditionally repayable and there are any number of circumstances that are determined by each individual contract as to the “repayability”. But many of those would not be repayable for many years later, until the project has come on line and the contract has been triggered by the sales numbers.

The Chair: Thank you. Mr. Lastewka.

Mr. Walt Lastewka: Thank you, Madam Chair.

I just want to go back to a remark you made concerning the NRC, IRAP and the technology partnership agreement and the $34 million. I think it was a recommendation a year ago or so that there be easier access to the TPC program for small and medium-sized businesses. Am I right?

Ms. Mary Zamparo: Yes, that's right. This was the programming that was put together whereby funds were earmarked by both TPC and IRAP for small and medium-sized businesses.

Mr. Walt Lastewka: Under the Province of Ontario infrastructure program, the one that was delayed, I think you mentioned that it's a slippage in the program.

Ms. Mary Zamparo: Yes.

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Mr. Walt Lastewka: Do we have a schedule of when that will come to a conclusion? Is it a full year away or two years away? How much extra time did we give for those programs to come to a conclusion?

Ms. Mary Zamparo: I believe the last year of scheduled spending is 1999-2000.

Mr. Walt Lastewka: I take it, then, that this will reappear in next year's budget.

Ms. Mary Zamparo: Yes, there would be funds in next year's budget, but the amount— This is a program that is very demand-driven. That's why there's a need to be able to re-profile money between years. The program is scheduled at the moment to sunset; there is no funding scheduled after 1999-2000.

Mr. Walt Lastewka: My other item is under the Canadian Space Agency. I had been reviewing this budget. In regard to the Canadian Space Agency budget, what I understand is that it's like a five-year projected program and is not part of the base of Industry Canada. Am I right on that?

Ms. Mary Zamparo: The space agency is part of the portfolio but is not part of Industry Canada, and the RADARSAT program is not part of the base of the space agency.

The Chair: Thank you, Mr. Lastewka.

[Translation]

Ms. Lalonde, please.

Ms. Francine Lalonde: Thank you, Madam Chair. I would first like to point out that if Partnership Technology Canada, at some point, invests about half its money in Quebec, it's because that's where the aerospace industry is concentrated and it has invested major amounts in research and development. Actually, I have already asked the House to grant more funding to those concerns because in this case, it's not a matter of subsidies but of investment. If they're not granted adequate funding, the risk is that these businesses that create many jobs and generate major income will go elsewhere.

I'd like to know how the amounts for Reschool/Community Access Program were allocated based on the education levels of the institutions and regions. Who are your partners? You mentioned a major increase.

[English]

Ms. Mary Zamparo: SchoolNet is guided and directed by a national advisory board comprised of provincial and territorial governments, universities, colleges and educational associations. Provincial governments actively participate in SchoolNet and help set up its investment strategy. Is it the province of Quebec you're specifically interested in?

[Translation]

Ms. Francine Lalonde: Yes, I would like to have the information on the province of Quebec.

[English]

Ms. Mary Zamparo: Over the past year, SchoolNet has worked closely with the Quebec government to ensure that its efforts complement—but do not infringe on—provincial initiatives. SchoolNet's relationship with the Quebec government at the administrative and political levels has been fruitful. The expansion of SchoolNet provides an opportunity for the Quebec government to enhance and expand French content on the Internet and establish a stronger basis for their youth through partnerships.

Several projects have already been developed in corporation with Quebec organizations, such as Cyberscol, Radio-Canada's La Course destination monde et La course Branchez-vous. Bell Quebec is working with the Ministère de l'Éducation et la Société to accelerate the conductivity of Quebec schools to the information highway.

[Translation]

Ms. Francine Lalonde: Madam Chair, that wasn't why I asked the question. I wanted to know exactly how many establishments, which establishments and which regions of Canada were getting Schoolnet benefits. We're talking about a rather major total amount of money and I know that each connection costs some $30,000. What will that money be used for? We're here to ask these questions and I'd like to get an answer.

• 1600

[English]

The Chair: Mr. Beausoleil.

Mr. Jerry Beausoleil: Let me try.

SchoolNet is a program that's designed to hook up all 16,500 schools, 3,400 public libraries and almost 500 of the first nations in Canada. That's the approach that's been taken to establish schools across the country. There are average costs associated with the program and with individual schools.

[Translation]

Ms. Francine Lalonde: As you're here to ask for a supplementary budget, it would be nice of you to tell us what you've done so far, what remains to be done and where the money will be invested. Those questions sound normal to me.

[English]

The Chair: I think Madame Lalonde is asking about where it has taken place and where it hasn't.

Ms. Mary Zamparo: It's taking place right across the country.

The Chair: But what areas of Quebec have been covered and what areas haven't?

[Editor's Note: Technical difficulty]

The Chair: There are too many mikes on right now. That's the problem.

Mr. Hull.

Mr. Doug Hull (Director General, Information Highway Applications Branch, Department of Industry): I run the SchoolNet program, among other programs. In terms of school connectivity, what we're aiming to do is to work with the provinces and territorial governments to have all schools connected across Canada by the end of this coming fiscal year.

At present, there are quite a number of provincial jurisdictions that actually have all their schools connected. The ones that don't are British Columbia, Ontario, Quebec and Nova Scotia, but in all cases they're down to the last few hundred schools. Basically, the goals will probably be met, and we'll be one of the first countries in the world to do so.

In regard to the question of average costs, we don't actually know, because the funding support that we provide through the SchoolNet program doesn't go to actually paying for connectivity for schools, with the exception of the first nations schools, which fall under federal jurisdiction. The rest of the school system, of course, is under provincial jurisdiction.

In addition to that, we have something called the community access program, and this is where the average cost that you mentioned comes into play. We use schools, libraries and other community centres to allow the public to access the Internet. We provide grants to these locations so they can open their doors to the public and build up their computer equipment or provide technical support to the sites. It's up the communities to choose those particular locations. In some cases, provinces have mainly used libraries. In some cases, they have used community centres, etc. The location is up to the community.

[Translation]

Ms. Francine Lalonde: We'll be coming back to this because I'm not convinced that everything is that dandy everywhere.

My next question is about the Spectrum Management Program. Will the Supplementary Estimates you're asking for allow you to settle the ham radio problem? I've been trying to reach Mr. Lynch since the beginning of the week and he hasn't called back. He had told me the problem was on its way to being settled. Ham radio operators need the assurance that the federal government will continue to act as a police force and make sure that those airwaves are not used for criminal purposes and that their purpose won't be changed. Can you give me an answer?

[English]

The Chair: Did you relate the question to the supplementary estimates before us?

[Translation]

Ms. Francine Lalonde: Yes, supplementary amounts that will be allocated to the Spectrum Management Program are being asked for.

[English]

The Chair: I missed that.

[Translation]

Ms. Francine Lalonde: And will the amateur radio problem be settled?

[English]

The Chair: Thank you.

[Translation]

Ms. Francine Lalonde: What is your answer?

[English]

The Chair: Mr. Beausoleil.

Mr. Jerry Beausoleil: I don't know the answer to that question, but we can certainly find out.

The Chair: Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): To start, maybe you could just explain one thing to me. Last year, the space program had a request under supplementary estimates. Now it's even larger. Why are you using the process of supplementary estimates rather than the main estimates to get your budget allocations?

• 1605

Ms. Mary Zamparo: It's probably just largely a question of timing, of the way they're managing the project. They don't always have the firm numbers at the time that the main estimates are going through.

Mr. Alex Shepherd: Is it reasonable to conclude that whatever estimates you put in the main estimates are always significantly understated and that's why you need to go to the process of a supplementary estimate?

Ms. Mary Zamparo: No. It's just a timing question. They have an allocation of money and it's just a question of when they draw from it.

Mr. Alex Shepherd: Okay. Maybe you could explain to me what the nature of the capital additions is for RADARSAT, the $50 million— What's that for?

Ms. Mary Zamparo: I'm sorry. I can't answer that question. We'll provide that information for you. I don't know what the capital is for.

Mr. Alex Shepherd: I thought that was the purpose of you being here today. Aren't you here to explain why you're asking for the money?

Ms. Mary Zamparo: We're here to speak to the whole portfolio, but every department in the portfolio does its own estimates. Although we have a broad overview of it, we only really understand the full details of those from Industry Canada. Although in general we are able to find some information from the other portfolio members at a broad level, when it comes to the detail of what that capital is for in regard to the RADARSAT program, I don't have any information on that.

We didn't think you would want us to come in here with seven or ten senior financial officers from each part of the portfolio to answer the questions. We'll provide that answer to you in writing.

Mr. Alex Shepherd: That would be the same for the space station. What's our long-term commitment to the space station?

Mr. Jerry Beausoleil: We're part of a program which is indeed funded for the next several years. In terms of where that program goes next, there have been a number of discussions with the Americans and within the government. That's an issue that ministers will be thinking about and deciding on in the not-too-distant future. There is an ongoing program.

Mr. Alex Shepherd: But when I see $6.5 million, I assume that's our current obligations, that we have no contingent liabilities for further expenditures.

Mr. Jerry Beausoleil: That's correct—beyond the supplementary estimates.

The Chair: Okay, Mr. Shepherd?

Mr. Anders, do you have a question?

Mr. Rob Anders: This goes to the whole point of whether or not we want to see increased funding go to some of these things, especially in light of— I want an explanation of this, because in order for me to go ahead and approve some of these other things, I want to get a sense of what's happened with some of the other moneys.

In regard to Spar Aerospace, we have a situation here where Industry Canada was challenged in the Federal Court over the whole issue of $845,000 the government said was owed to it. That issue was settled out of court and, right after that, Spar once again qualified for an injection of $4.8 million. You had to take them to court to get the money out of them, to shake them down, and then, all of a sudden, we gave them almost $5 million again. It calls into question all the other funding here. I want to get an explanation of that.

Ms. Mary Zamparo: Presumably, in the first case, it was under an old DIPP contract. Those are very complex contracts. Occasionally it does happen that there's a dispute between the parties and they go to court to settle it.

When it comes time, though, for them to come to TPC with a project, TPC wouldn't be prejudiced because of the fact that there was some legal action between the parties. Under TPC grounds, the project would be judged on its own merits. Those projects are determined on the basis of whether they are good investments. If it got funding, it would have been determined that it was a project worth supporting.

The Chair: Mr. Anders, could you please watch the language you're using at the table? “Shake down” is inappropriate.

Mr. Rob Anders: Well, at the end of the day, the taxpayers are on the hook again for another $4.8 million.

The Chair: Mr. Anders, you're entitled to ask your questions about the dollars and the supplementary estimates. I would ask that you try to phrase them properly.

Mr. Rob Anders: Well, $845,000 had to be taken to court and—

• 1610

The Chair: There's no dispute. It's public record: $845,000 went to court—

Mr. Rob Anders: —the fact that I'm drawing attention to another $4.8 million that was once again awarded to them—

The Chair: It was—

Mr. Rob Anders: —when there was a questionable $845,000— I think it's perfectly legitimate to bring it up in this committee.

The Chair: I didn't say it wasn't. I asked you to watch your terminology.

Mr. Rob Anders: We're going to move on from terminology to the next section, which is budget projection discrepancies. The way I see it here, we have subsidies for market development that were supposed to be cut in half and fell by only a quarter. And subsidies for cultural industry companies, which were to have dropped by a third, according to the 1995 budget, actually soared by 70%.

Ms. Mary Zamparo: I'm sorry. Which table are you referring to?

Mr. Rob Anders: I'm basically taking things out of a Maclean's article here, but I think this is very pertinent. You're asking us to go ahead and approve $30 million worth of increases in ACOA money. You're asking for $4 million in terms of funds for extra bank merger review. We have a lot of other subsidies going on here, and I'm calling into question some of the things that have happened previously because I think it speaks to the issue of whether or not I want to continue to give you more money for some of these projects.

Mr. Walt Lastewka: On a point of order, Madam Chair, if the member is going to question certain parts of the estimates, I think it's important that we talk about the portion he is questioning. If he is going to talk about tables, he needs to go back to what's in the report so we can follow him. I don't think we're here to talk about Maclean's or about other reports. That's his research, his business, but if he's going to ask questions they should be specific to a portion of the estimates so we can all follow.

Mr. Rob Anders: I'll leave the general question with you, then: why doesn't the department stick to the budgets that have been set out for it?

I'm going to move on to my next point—

The Chair: Your last question, Mr. Anders.

Mr. Rob Anders: —my last question, the whole issue of secrecy versus scrutiny. We have professors, economists, at York University, like Fred Lazar, who, on this whole issue of technology partnership funding, is saying that because of a lack of transparency we have major problems and that if we had more scrutiny applied to these things taxpayers would know whether or not their dollars were being paid back, and we'd feel a lot more justified in terms of giving out these dollars. I want to have you address the whole issue of lack of transparency with regard to these funds.

The Chair: Mr. Anders, I believe they've said several times that TPC and other programs are based on the merits of the application. I really think it's inappropriate to pursue this line of questioning.

Mr. Rob Anders: I've brought up cases of fraud and where taxpayers have lost money—

The Chair: No. In fact, you've brought up a magazine article, and you can't refer it to the pages in the estimates. I think we're here to talk about specific questions in the estimates, not about policy with regard to politics. So if you have specific questions about the supplementary estimates that are in front of us, that's what we're here for today.

Mr. Rob Anders: I'll leave it with that: we're going to see another $4 million—

The Chair: Thank you, Mr. Anders.

Mr. Lastewka, do you have any further questions?

Mr. Walt Lastewka: No further questions.

[Translation]

Ms. Lalonde and Mr. Dubé, do you have any further questions?

Mr. Antoine Dubé (Lévis-et-Chutes-de-la-Chaudière, BQ): Yes, Madam Chair. At different points in the Supplementary Estimates, you're asking for extra amounts for professional and special services. Could you clarify what you mean by these professional and special services?

Ms. Francine Lalonde: Are you privatizing any sector of your activities?

[English]

The Chair: Mr. Dubé, specifically what are you referring to?

[Translation]

Mr. Antoine Dubé: You have the item "professional and special services" at different points of the document. I'm having problems reading the text because it is written so small.

Ms. Francine Lalonde: I could read it for you.

[English]

The Chair: What page?

[Translation]

Ms. Francine Lalonde: On the first page, for example, under the heading "Industry, Department", at point 4 under the heading "Objects of expenditure", you have the item "Professional and special services".

Mr. Antoine Dubé: And you have that same item at several other places in the document.

Ms. Francine Lalonde: Also, under the heading "Industry, Canadian Space Agency", you have item 4 under "Objects of expenditure" where you're asking for an amount of $14 million for professional and special services. Then—

[English]

The Chair: Thank you. That's fine.

[Translation]

Ms. Francine Lalonde: You get it?

[English]

The Chair: I think they understand.

Ms. Mary Zamparo: Typically, every department would have a number in there, because that's simply the work that you buy, but not from employees. Usually, it's work done on contract, or maybe it's a special study. Basically, it's the work you acquire that's not done by your staff.

[Translation]

Mr. Antoine Dubé: You have the floor.

• 1615

Ms. Francine Lalonde: It would be interesting to hear further explanations from you on this. One could have expected these amounts to be directly allocated to specific programs such as the Canadian Space Agency or Schoolnet/Community Access Program. We don't know who will be accountable for those monies; it seems they will be invested in the public service, if I may express it that way. We only know that they will probably cover contracts given to private sector businesses. Is that right?

[English]

Ms. Mary Zamparo: It's operating money that one would use to run a program. If you need to buy a certain kind of expertise, it means that you would have money and you would do that through a contract. Or if you had to buy certain kinds of information, like survey data or whatever, that's your operating money to run the program. Typically, that's what's in that category.

The Chair: Mr. Dubé.

[Translation]

Mr. Antoine Dubé: My next question is more general in nature. On page 2 of your brief, you say:

The Supplementary Estimates for the Industry portfolio of $278.5 million account for about 9% of the total Supplementary Estimates—

On the other hand, on page 3, you mention an addition of a $165.4 million amount for the Industry portfolio partners. Instead of showing up with these requests, couldn't you make a bit of an effort and dip into the unused portions of your budget? I can see that some of your unexpended monies are carried forward from one year to the next.

[English]

Ms. Mary Zamparo: In fact, that's what the carry forward is. It's money that was appropriated last year, approved last year, and has to be carried forward into this year. The maximum is 5%. But we still have to ask for that money in supplementary estimates. Typically, that is a big part of it.

[Translation]

Mr. Antoine Dubé: It seems that the 9% variation is major. We should remember the context of the cuts that were being made in prior years and remember that the Minister can use a rather simple trick. I once was an official in a municipality and I remember that we'd manage to come up with budget forecasts that tod the line, but during the years some people came up with Supplementary Estimates and, finally, the objective was never attained. That's what concerns me somewhat in the exercise we're engaged in here today.

[English]

Ms. Mary Zamparo: Much of that 9%, of course, is either the carry forward or money that's being re-profiled from one year to another. Sometimes it's for new initiatives announced in the budget. A lot of it is this money that's already being shifted from year to year.

[Translation]

Mr. Antoine Dubé: And what is that percentage, in your estimation?

Ms. Francine Lalonde: What would these new monies represent as compared to the recycled amounts?

[English]

Ms. Mary Zamparo: Maybe between one-third and one-half, between the carry forward and lapses from the previous year that are carried forward, that alone could be— It varies a lot from year to year, but it could be between a third and a half.

Mr. Jerry Beausoleil: All of the CAP and SchoolNet money was announced in the 1998 budget, so that appears in here, and that's a pretty large number too.

Ms. Mary Zamparo: The Ontario infrastructure re-profiling, for instance, from one year to the next, appears in here as well, and the carry forward is in there, so—

[Translation]

Ms. Francine Lalonde: And what were the new amounts or the new estimates?

[English]

Ms. Mary Zamparo: The Competition Bureau money is new money. The spectrum management program money is new money to the department, but the way that works is that it is money that comes from their licensing fees, and if they meet a certain target, that money comes to the department instead of going to the CRF. CAP and SchoolNet is new money because it was announced in the budget. That's about it.

[Translation]

Ms. Francine Lalonde: That's all? The new money only represents $17 million?

[English]

Ms. Mary Zamparo: For Industry Canada? Yes.

[Translation]

Mr. Antoine Dubé: Of the $278 million?

[English]

Ms. Mary Zamparo: Fifty.

[Translation]

Mr. Antoine Dubé: That's far from being a third or a half, Madam.

• 1620

[English]

Ms. Mary Zamparo: I'm speaking generally. I meant that in any year it's between one-third and one-half. It's going to vary from year to year.

The Chair: Thank you.

We have scheduled this meeting to go to 4.15 and then we have a steering committee meeting. I propose that we move to the votes.

Mr. Alex Shepherd: On a point of order, Madam Chair, just to confirm what the witnesses said, did they say they'd provide a detailed net cost analysis of vote 35?

The Chair: Yes, I believe that Ms. Zamparo and Mr. Beausoleil gave undertakings during the meeting. They'll follow up on that with the clerk.

All right. Are we prepared? By unanimous consent, I could call all the votes at the same time.

Some hon. members: Agreed.

The Chair: On division?

I need unanimous consent to call them all at the same time and then to ask if they carry. If I don't have unanimous consent, I have to call them all individually. Do I have unanimous consent to call them all at the same time?

Some hon. members: Agreed.

[Translation]

Ms. Francine Lalonde: We can't say that this is a satisfying exercise, Madam Chair. We get the impression we're just rubber stamps.

[English]

The Chair: Madame Lalonde, do I have unanimous consent to call them together?

[Translation]

Mr. Antoine Dubé: No.

Ms. Francine Lalonde: Should we ask for a vote?

Mr. Antoine Dubé: Yes.

[English]

The Chair: Okay. Fine.

INDUSTRY

Department

Vote 1b—Operating Expenditures ...... $65,717,954

(Vote 1b agreed to on division)

Department

Vote 5b—Contributions ...... $47,412,000

(Vote 5b agreed to on division)

Atlantic Canada Opportunities Agency

Vote 20b—Operating expenditures ...... $2,051,050

(Vote 20b agreed to on division)

Atlantic Canada Opportunities Agency

Vote 25b—Contributions ...... $30,570,474

(Vote 25b agreed to on division)

Canadian Space Agency

Vote 30b—Operating expenditures ...... $6,326,485

(Vote 30b agreed to on division)

Canadian Space Agency

Vote 35b—Capital expenditures ...... $72,394,219

(Vote 35b agreed to on division)

Copyright Board

Vote 50b—Program expenditures ...... $532,376

(Vote 50b agreed to on division)

Economic Development Agency of Canada for the Regions of Quebec

Vote 55b—Operating expenditures—To authorize the transfer of $1,346,380 from Industry Vote 60, Appropriation Act No. 2, 1998-99 for the purposes of this Vote ...... $1

(Vote 55b agreed to on division)

National Research Council of Canada

Vote 70b—Operating expenditures—To authorize the transfer of $2,459,484 from Industry Vote 80, Appropriation Act No. 2, 1998-99 for the purposes of this Vote and to provide a further amount of ...... $9,230,015

(Vote 70b agreed to on division)

National Research Council of Canada

Vote 75b—Capital expenditures—To authorize the transfer of $539,999 from Industry Vote 80, Appropriation Act No. 2, 1998-99 for the purposes of this Vote ...... $1

(Vote 75b agreed to on division)

Natural Sciences and Engineering Research Council

Vote 85b—Operating expenditures ...... $2,281,178

(Vote 85b agreed to on division)

Natural Sciences and Engineering Research Council

Vote 90b—The grants listed in the Estimates ...... $1,195,540

(Vote 90b agreed to on division)

Social Sciences and Humanities Research Council

Vote 95b—Operating expenditures ...... $1,556,852

(Vote 95b agreed to on division

Social Sciences and Humanities Research Council

Vote 100b—The grants listed in the Estimates ...... $3,817,500

(Vote 100b agreed to on division)

Statistics Canada

Vote 110b—Program expenditures ...... $17,151,215

(Vote 110b agreed to on division)

Western Economic Diversification

Vote 115b—Operating expenditures ...... $1,622,850

(Vote 115b agreed to on division)

Western Economic Diversification

Vote 120b—Contributions ...... $16,643,304

(Vote 120b agreed to on division)

The Chair: Shall I report to the House all the supplementary estimates (B) votes under Industry for the fiscal year ending March 31, 1999?

(Motion agreed to on division)

The Chair: I shall report it on division.

Thank you very much. I want to thank the representatives from the department who were with us today. We'd appreciate it if you could reply to us in regard to the questions that were raised.

I remind steering committee members that we're going to have a steering committee meeting immediately, and we'll be going in camera for that. This meeting is now adjourned. I remind you that tomorrow we're meeting all day, from 9 o'clock until evening. Thank you.